Revisiting Use of “Shall” in Contract Drafting

Use of shall in contracts will remain a topic of discussion. Today’s entry is this post on IP Draughts by Mark Anderson. It summarizes the current state of play.

And it mentions that I’m in favor of using shall for contract obligations, and only contract obligations. I actually recommend an even narrower use than that—use shall only to impose an obligation on the subject of the sentence, as in Acme shall purchase the Shares. A contract can, for better or (usually) worse, articulate obligations in other ways.

I explain my position at some length in MSCD, and also in this article. But here’s the gist of it:

  • Contracts are clearer if each category of contract language uses a different verb structure. Using shall for obligations imposed on the subject of the sentence gives drafters an extra verb structure to work with.
  • Using shall to impose an obligation on the subject of the sentence represents a departure from my mantra that you should use standard English in contracts. But the advantages of this use of shall outweigh the disadvantages, particularly as use of shall is, from the perspective of readers of business contracts, all too standard.
  • Courts have long acknowledged that shall serves to impose obligations. Most of the litigation involving shall pertains to statutes, not contracts. And where use of shall can give rise to disputes—if it’s used inappropriately to express a condition—getting rid of shall wouldn’t fix the problem.
  • Throwing shall under a bus is a Procrustean solution that addresses the symptom—overuse of shall—but not the problem, which is that most lawyers aren’t attuned to nuances of verb use.
  • It’s just as well that I favor disciplined use of shall—that seems more achievable than getting the transactional world to stop using the word entirely.

Mark also mentions the views of Bryan Garner, who recommends getting rid of shall entirely. The most recent statement of Bryan’s views on shall are contained in the third edition of Garner’s Dictionary of Legal Usage, which appeared this year. (See pages 952–55.)

The relevant passage in the third edition is essentially unchanged from that in the second edition. One of the few differences is that Bryan notes in passing that the point of view expressed in MSCD is “unpersuasive.” It’s not my place to suggest that Bryan should gird his loins and enter the marketplace of ideas to duke it out. But for purposes of the marketplace of ideas, Bryan’s one-word dismissal can safely be ignored.

I have my own one-word assessment of Bryan’s treatment of this subject—”unhelpful.”

Bryan seems to favor the “ABC rule,” which has it that must be used to denote all required actions. But for purposes of business contracts, that’s trumped by the following:

The word [must] may strike the wrong tone particularly when both parties to a contract are known quantities, such as two well-known corporations. It seems unlikely that, for example, an American car manufacturer and a Japanese car manufacturer engaging in a joint venture would want the word must to set forth their various responsibilities. Indeed, it seems odd to draft one’s own contractual responsibilities with must: a lawyer for Ford Motor Company is unlikely to write Ford mustFord must … Ford must …. The word will is probably the best solution here.

I find this assessment problematic in three respects:

  • First, why should the word you use to express obligations depend on how well-known the parties are?
  • Second, I have yet to encounter a drafter of business contracts who distinguishes between words used to express obligations depending on whether the obligation is imposed on the drafter’s client or the other guy. That perspective is evident in the lease that Bryan discusses immediately after the quoted language, with the landlord’s obligations being expressed by we will and the tenant’s obligations being expressed by you must. That approach may work for consumer contracts, but it has no place in business contracts.
  • Third, my biggest problem with Bryan’s assessment is his statement that “will is probably the best solution.” When it comes to analysis of English usage, you have two opposing camps, the describers and the prescribers. (A useful account of this ongoing tussle is Bryan’s essay “Making Peace in the Language Wars,” in Garner’s Modern American Usage.) Given that contracts regulate conduct, and given the unholy mess that is traditional contract drafting, the only sort of guidance that makes sense is reasoned and clear-cut prescription. Bryan’s wishy-washy “is probably” falls well short of that.

While I’m at it, here from the same passage is a problematic extract pertaining to will:

[I]f a future tense really is needed, as to express a future contingency, then will is the word. But this circumstance is not common, since the best drafting should generally be in the present, not the future tense.

Yes, it’s best to use will only with respect to future contingencies, but there’s nothing uncommon about that. Language of policy relating to future contingencies is an utterly routine component of contract language. Here’s one example: Any attempted transfer of Shares of violation of this agreement will be void. Here’s another: This agreement will terminate if the Market Price falls below $1.00. See MSCD 2.161.

The upshot is that I’m at peace with MSCD‘s recommendations regarding shall, will, and must. But I don’t want to overemphasize my differences with Bryan on this subject. For both of us, the main point is that shall is grossly overused.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.